Trustee for bankrupt law firm sues JPMorgan for allegedly aiding lawyers' theft

Kossoff pleaded guilty to one count of fraud and three counts of grand larceny in December 2021 after New York state prosecutors accused him of misappropriating more than $14.6 million from at least 35 people and companies.

Kossoff, once a fixture of the New York real estate market, used money from his clients' accounts to support another family business and personal expenses, including spending an average of $16,000 monthly on personal credit card bills and $19,000 a month to rent a Manhattan luxury apartment, prosecutors said.

He was sentenced to up to 13.5 years in prison. New York correctional records show that Kossoff, 72, is incarcerated at Groveland Correctional Facility and is eligible for parole starting in November.

The trustee overseeing the bankruptcy of disbarred New York attorney Mitchell Kossoff's law firm has sued JPMorgan Chase, alleging the bank was "complicit" in Kossoff's theft of nearly $20 million in client funds.

In a lawsuit filed Wednesday in Manhattan bankruptcy court, Albert Togut, the court-appointed Chapter 7 trustee of Kossoff PLLC, said JPMorgan Chase "knew about Kossoff’s commingling and misappropriation of client funds, and yet did nothing to prevent or stop it."

The lawsuit alleges that JPMorgan Chase failed to report Kossoff's banking activity to the New York Lawyers’ Fund for Client Protection, a state agency, as required after Kossoff bounced a check from one of his client accounts in 2015.

"The fraud would have ended there. Defendant allowed it to continue," Togut said in his lawsuit. He did not immediately respond to a request for comment.

A spokesperson for JPMorgan Chase did not immediately respond to a request for comment.

Togut in his lawsuit said he is seeking $18.5 million from JPMorgan Chase.